Regardless of industry, those in small business marketing struggle to track budgets. Even the savviest marketers have difficulty to gain an accurate picture at any given time. What they plan, committed and spent changes daily. Plus, the information is dispersed across people, emails, spreadsheets and finance systems.
So, marketers find it difficult to make the most of their budgets and build credibility in the eyes of finance. Here are the 10 most common problems that marketers face:-
1. Lack of Internal Collaboration
One marketer attempts to develop the perfect marketing plan, even though multiple people own areas of the marketing budget. Also, it’s hard to reconcile budgets across teams making the final budget untrustworthy.
Marketers often perceive planning as a top-down process with one person owning the entire budget. But really everyone spending marketing monies needs to be involved in the budgeting process. Otherwise, you end up with a plan that never becomes reality, and is inaccurate.
2. Planning Based on Last Year’s Budget
As you’re constantly busy, you rush through the planning process by tweaking last year’s budget instead of starting with this year’s goals.
Start your plan by answering the question, “What are we trying to achieve with marketing investment over the next year?” Clarify this from the corporate viewpoint and a strategic marketing perspective. Then put in place a plan that supports those objectives. In other words, focus your investments where it makes most sense.
3. Spreadsheet Hell
Marketers often create massive workbooks using Excel. It’s not uncommon for one person to create a budget spreadsheet with multiple tabs and unwieldy number of columns.
While this person understands the details, anyone else would be confused because they weren’t involved in creating the spreadsheet. Countless spreadsheets creates problems, and don’t offer the integration, visibility, or control needed to justify spending.
This creates confusion and frustration within marketing, and results in poor financial reporting for either the Finance or Marketing Director, who control the purse strings. Also, you waste time with spreadsheets etc. instead of strategically on the plan.
4. Planning the Budget with Finance
You need alignment between marketing and finance when it comes to the budget. Problems arise when finance assigns a couple of line items to marketing, and marketing builds its plan around the finance framework. This satisfies neither.
Fitting marketing spend into finance’s reviews is stressful for marketers risking mistakes being exposed and loss of credibility. Without collaboration, marketers find it difficult to answer finance’s questions.
Marketers should build detail within the finance plan but keep it separate from their stand-alone budget. Thus, marketing can show that marketing is budget conscious and supports the company’s goals.
5. Hiding the Plan Frustrates Good Decisions
Your marketing plan needs to flow into the day-to-day execution of the marketing business, informing what people are doing on a daily basis. That means it needs to be seen by all, so they can see their part in the plan and budgets.
6. Not Knowing what you’ve Spent so far
When you lack access to the data, you’re unable to associate expenditure with the marketing programmes currently running. You then struggle to share this information with external decision-makers in a format they’ll understand. So, you’re challenged to make better use of budgets, justify spend and secure additional funds based on actual performance.
It’s tough to reallocate budget where it’s most needed when you’re not clear if the money is available. Yet many marketers lack this clarity because they pass the budgeting plan to finance and then rely on them to tell them current expenditure. You need to understand expenditure against plan at any given time.
7. Unable to Communicate the Plan and Progress it
Marketers are seen as having a poor grasp of their budget. With so many programmes at any one time, it’s difficult to reconcile and show progress. One way to counter this is to better communicate the plan – to your entire team, so you can execute against it.
8. Failing at Forecasting
Forecasting isn’t just for sales. Yet marketers find it difficult to accurately forecast their future marketing spend. By tying invoices and purchase orders together with marketing programmes, you can provide accurate forecasts on your marketing spend.
9. Struggling to prove ROI
Proving ROI is critical to illustrating the value of marketing’s contribution to the company, especially with the data now available. Pulling together costs and data for ROI analysis is a time-consuming and manual process. You need software that helps you connect cost data to your marketing programmes for ROI reporting.
10. Adapt or Flounder
No matter what you do, your marketing plan will never be perfect. Design a budgeting and planning process that builds in agility. Look what you’ve spent to date so you can reallocate funds to what works, and stop investing in what isn’t.
Adapt your plan based on what happens as the plan. Evolve your overall budget as you go - stay open to change and move investments around as needed.
That’s my tips on budgeting. To be really successful why not download the eBook from the link below:-